High water and feed prices and ongoing dry conditions are forcing dairy farmers out of the industry, with dairy farms increasingly being repurposed for other industries.
The number of dairy farms in the Shepparton region has reduced by more than 85 since 2015-16 according to Australian Bureau of Agricultural and Resource Economics and Sciences figures, with ongoing conditions and pressure on the industry expected to force more of the region’s current 861 dairy farms out of the industry.
While supply continues to outstrip demand in the property market, Opteon Goulburn North East director and property valuer David McKenzie said there was still interest in dairy farms with water and quality soils, with many horticulturists happy to pay good money for properties.
‘‘Changing use is really strong, the interest in dairy is certainly on the larger scale,’’ Mr McKenzie said.
‘‘The downward price on dairy has probably been somewhat disguised (due to changing use).
‘‘Dairy vendors have to be realistic with those that can be easily converted being purchased ... The most expensive dairies ever sold in the Goulburn Valley have been in the last six months.’’
In 2016-17 the dairy industry accounted for almost a third of the value of the Shepparton region’s $1.5billion agricultural production.
Although there remains interest in adaptable farms and those of a larger scale, Mr McKenzie said medium-sized properties were feeling the effects of the lukewarm market, while cropping properties have hit record highs and continue to be ‘‘very strong’’.
The figures come as the Goulburn Valley sees a suite of new investments in farmland, with more than 30 solar farms proposed for the region, a new medicinal cannabis facility on the way and an increasing number of vegetable farmers moving in.
The overall number of farms across the region fell almost six per cent in one year, with 2219 farms in the region according to 2016-17 figures, a fall of almost six per cent in just one year.
However, it’s not all bad news — beef, cropping and sheep farmers are on the rise and apple and pear properties remain largely steady.
Kevin Hicks Real Estate principal Kevin Hicks said challenging conditions have had an effect on the current real estate market, with buyers overwhelmingly focused on properties with water.
‘‘There are a few broadacre — sheep and grazing land — and there’s been a bit more interest in broadacre cropping properties with some interest in small-scale properties for vegetables,’’ Mr Hicks said.
‘‘Those getting into vegetables are buying temporary water if they need to.’’
Mr Hicks said the changing make-up of agriculture in the region meant the typical 32ha to 36ha settlement blocks were ‘‘no longer an option’’.
He said an increasingly professional approach to farming meant buyers were looking for a number of specific requirements to be met.
He said being a dairy farmer continued to be tough, but he expected things to recover.
A Rabobank report predicts agricultural land prices will continue to climb over the next year, with the national median price for agricultural land at a 10-year high, following strong growth during the past five years.